Loss of use — often labeled Additional Living Expense (ALE) and shown as Coverage D on a homeowners policy — is one of the most appreciated coverages at claim time, yet many homeowners don't know it's there. It pays the extra costs of living elsewhere when a covered loss makes the home temporarily uninhabitable.
When it kicks in
It applies when a covered peril — such as a fire — damages the home badly enough that the family can't live in it while repairs are made. (If the cause of loss isn't covered, ALE generally isn't triggered.)
What it pays for
- Temporary lodging — a hotel or rental home
- Restaurant meals above your normal grocery spending
- Extra costs like laundry, pet boarding, or added commuting
- For rental property owners, lost fair rental value
The "additional" part is key
ALE reimburses the increase over your normal cost of living, not your total spending. If you normally spend a certain amount on food and now spend more eating out, ALE covers the difference — not the entire restaurant bill.
Limits to watch
Coverage is usually capped as a percentage of the dwelling limit and may be limited by time (often the reasonable period to repair or replace the home). For a major loss with a long rebuild, clients should confirm the limit is adequate, since temporary housing can add up quickly.
Educational only — confirm against the actual policy and your carrier's guidelines.